Axios has an annual Thanksgiving feature in which the publication looks at (verifiable) economic evidence for which we should be grateful. Given the mountains of misinformation and outright propaganda about the economy being promulgated for political purposes, it’s worth taking a look at what the numbers actually show.
First of all, the article says we should be grateful is that lots of Americans are working. Predictions that workers wouldn’t return to the labor force after the pandemic were simply wrong.
Workers have joined the job market in droves. The rebound in supply, lifted in part by an immigration surge, has helped the labor market come into better balance amid continued low unemployment.
The share of workers aged 25-54 who were employed was 80.6% in October — down slightly from a multi-decade high reached over the summer but higher than was seen in any month between June 2001 and January 2020.
For women aged between 25 and 54, the share who are in the labor force is near its highest level ever. So much for pandemic-era fears of a prolonged “she-cession.
Not only are people working, real wages are rising.
No matter your preferred wage growth measure, the data tells a similar story. While pay isn’t rising quite as fast as 2022’s breakneck pace, inflation has cooled much faster.
Not only that, wages finally began to outpace inflation this year; average hourly earnings for rank-and-file employees are up 4.4% over last year, and inflation is down to 3.2%. That should help keep consumer spending —a bedrock of the U.S. economy– healthy.
There are other grounds for gratitude:
The banking crisis that wasn’t. Eight months ago, the collapse of Silicon Valley Bank and two other large regional banks looked like the start of a banking crisis that risked choking off lending economy-wide. It hasn’t happened.
There have been no further major bank failures, and credit availability has generally remained stable.The government’s decision to use emergency authorities to make even the largest depositors in SVB whole instilled confidence in the banking system and prevented both mass outflow of deposits and large-scale contraction of bank lending.
If you are an enthusiast of the Fed’s H.8 report (Assets and Liabilities of Commercial Banks in the United States, as it is known) — and who isn’t — you will see that banks’ aggregate real estate loans, consumer loans and most other forms of lending are higher now than a year ago.
Commercial and industrial loans are down only very slightly, to $2.775 trillion in October from $2.777 trillion a year earlier.
And gas prices are coming down.
We need more media reports based upon economic reality, because there is a persistent difference between that reality and the public’s perception of the economy, which is much more sour than it should be in some areas, and far too sanguine in areas that ought to be seen as deeply troubling.
Take opinions about inflation. Polls show that Americans believe inflation to be much higher than the statistics show. There is scant media attention to the fact that the U.S. brought the rate of inflation down more rapidly than Europe (we won’t even discuss Argentina…)The annual inflation rate in the EC was 4.3% in September 2023, which was down from 5.2% in August. A year earlier, the rate had been 9.9%.
What is truly ironic is that Americans hold these negative beliefs about what has been genuinely positive performance at the same time that most are blissfully ignorant of far more worrisome aspects of the economy.
According to a 2015 article in Scientific American,
The average American believes that the richest fifth own 59% of the wealth and that the bottom 40% own 9%. The reality is strikingly different. The top 20% of US households own more than 84% of the wealth, and the bottom 40% combine for a paltry 0.3%.
That gap has not narrowed.
I have spent the last 30 years warning about the consequences of the low levels of civic literacy in this country. My focus has been on the nation’s constitutional framework–the Constitution, the Bill of Rights, and the philosophical premises that undergird those documents. I now realize–thanks to the persistent disconnect between economic reality and public opinion about the economy– that the country has major problems with economic literacy as well.
Our economy has problems. They just aren’t the ones a majority of our citizens recognize or understand. We aren’t going to be able to address those problems unless a majority of our citizens can accurately identify them. Basic economic literacy is just as necessary as constitutional literacy if the voting public is going to install public officials who understand those basics.
I’m beginning to understand why we have so few citizens who cast truly informed votes.
“Basic economic literacy is just as necessary as constitutional literacy if the voting public is going to install public officials who understand those basics.“
And there’s the fly in the ointment. The mostly willful ignorance of the public is astounding, with them preferring to listen to whatever convenient talking heads that support their beliefs. Finding accurate information in mainstream media is next to impossible, or buried at the bottom of page 4 of the paper. Meanwhile, as a result, public officials are installed who are just as ignorant as the public that votes them into office.
Yes. I keep reading bits about people who blame Biden for the “lousy” economy. Where do they get that? Right. One kind of media.
That said, why doesn’t the media present the facts and trends you mentioned in today’s essays. Well, some might say that since the media is owned and operated by billionaires too, they slant the reporting toward their favorite Republican “agendas” and candidates. Imagine that.
And we know from history that EVERY time Republicans have been in charge of the economy, they screw it up… big time. It was John Maynard Keynes’ philosophy that FDR embraced that helped lift our country out of the depression caused mostly by deregulated banks.
But hey… If you’re a Republican, FDR was satan incarnate. Republicans are philosophically opposed to having a middle class – even though that’s what’s electing them to power these days. Kinda gives credence to the brain-drain essay from yesterday. The red states’ brain drain is THE symptom of Republican failure. And they vote.
As long as most people continue relying on Fox and similar sources for information, this will not change.
All of the information above, blog and comments, may be true but…why did I read a few days ago that major banks will be closing branches in several states? Including my PNC Bank in Indiana; no idea if my branch will be among them and I’m afraid to ask as I would be losing good old-fashioned friendly, personal service. We of the older generation are probably among the complainers about the economy; we can remember 5 cent candy bars. I treated my granddaughter and great-granddaughter to lunch at Popeye’s Chicken last week; 1 chicken sandwich and fries, 2 kid chicken nugget meals, 2 small drinks and 1 water, just under $27.00. My girls were big-eyed when I told them I used to pay that amount to feed all 5 children, both parents, get toilet paper and Kleenex and all cleaning supplies weekly.
Also; the service at Kroger stores providing pick-up sites and hot meals is closing even though they had a $10 MILLION profit range last year. The self checkout registers with only one cashier and a long line must be saving a bundle and are they are discounting the slipped-through, not paid for items some customers are getting away with. Target store in defunct Washington Street Mall no longer accepts checks; other stores have cash or card only service. We receive bills asking us to “go paperless”; all moving us closer to that cashless/checkless future we were forewarned about in the 1950s and 1960s. But the forewarning included our economy would all be in the control of banks may be in question with banks closing branches; so where are we moving to or are we moving at all? This cannot be attributed to President Biden; the credit card debt has been reported in the billions so people using those cards are not paying full payments; often the creditors allow interest-only payments before closing the card use.
And I do not watch Fox News; an occasional check during major events to see if they are covering that news at all. During the initial Russian invasion of Ukraine I found an auto race.
NOW the D’s need to TELL that story. Widely. Repeatedly
I assumed that literacy meant reading and writing on at least a functional level of proficiency.
Using that assumption, I have only met a few who went through life illiterately. The most memorable was on a flight into O’Hare back in the day when I traveled on business. Here’s what I learned from/about my seatmate on that short flight from Grand Rapids, as I recall:
He was born into a cotton sharecropper family. Never went to school. Escaped as soon as possible. Hitchhiked randomly to survive and ended up in Upper Peninsula Michigan, painting barns. He was never left. He recalled that he hated barn painting (but had done it for over 25 years). His family elected him to be the first to fly (they all chipped in for his ticket). Purpose? Out of respect for his family, he was going to California to pick up the body of his brother to accompany it back to the UP for proper burial.
I watched and helped one of the bravest men I will ever meet as we stepped off of the plane into a concourse of what was then the busiest airport in the world. The best I could do for him was hand him off to an airline customer service person (remember those?), and I never saw him again.
He trusted me and her that much. What alternative did he have?
What’s my purpose in re-telling this story from my life? To make the point that since then, what has changed for me is the realization that the stakes today and even more in the future for literacy have been raised by many orders of magnitude well beyond readin’ and writin’ and ‘rithmatic, taught to the tune of the teacher’s stick.
Navigating life successfully no longer means reading signs. It means understanding all aspects of life pertinent to flourishing now and in the future.
Please let that simmer in your minds for a while.
The levels of ignorance point to an even larger American problem.
Ignorant people run our economy and institutions and they are making lots of mistakes of judgement. It runs through all levels of our society. Top to bottom. This creates operational inefficiencies, operational errors, and accumulates future liabilities in terms of both operating maintaining systems.
Operational errors, problems with human comprehension and logical analysis are dealt with on a continuing basis. Nearly every American city has huge unfunded liabilities for antiquated and failing infrastructure. Physical items like sewage, roads and utilities are failed and failing yet ignored at tremendous cost. These are errors of omission.
Medical care, governmental functions like the USPS, air traffic control, and municipal utilities, are operationally inefficient and fraught with operating errors. These are errors of commission. People complain but never seek out true actual cause, cost, or the full implications of these failures. Cumulatively they are extremely significant. Deaths from Medical errors are numerous.
Yet Americans are impervious to the frequency, contributors, and costs of even a fraction of our operating systems issues. Consider the USPS. They handle 421 Million/pieces of mail each day. If they operate at 99.9% effectiveness 421,000 pieces of mail would be mishandled. This amounts to a daily increase in cost as these errors would send 1,000’s of truckloads to the wrong destinations. Patients die. Over-fertilization and the ensuing runoff pollutes our water, and leaky water amounts to rivers, then oceans of wasted resources.
Yet most people would say these systems work fine when their Team is in charge. This is not supported by reality yet it is common to see the economy as improved, medical services that are safe, efficient, and cost effective and governmental functions that operate smoothly
We don’t just have a literacy problem. We have problems with honesty, courage and even lack the courage to discuss negative items and/or bad news. This is true in all applications except when it is media.
They keep us somewhat honest and we Americans hate them for it.
In today’s digital world, people do not “read” anything but the prices on their receipts. Given that attention span and their fond “memories” from pre-Covid, the economy is a disaster. Consumerism is the religion that guides their lives.
Lester. Are you describing yourself? You are a person, right? My point is, don’t over generalize.
These greedy bakers just rip us off. We got pre approval for a home loan. Our credit scores are over 840 and the bank wants 6.5%! Come on! If our scores are that high, we should get a better rate than that! Sheesh.
Just to stir the pot: Is our problem that too many of society’s resources are going to the elderly and not enough to the young?
In the past 50 years, we have realized a major decline in poverty among our senior citizens. The increased use of time by the young, their parents and grandparents in sports vs education does little for civic literacy. The allocation of time is as important as the allocation of dollars. I’d say more but I have to get to my grandson’s game. :=)
I’m amazed at comments on news sites when people say how bad the economy is. Ask a person, if that’s their personal experience, or are they repeating something they were “told” and you find out they are doing fine, but they “know” things are bad for other people. Or worse yet, it’s Biden’s fault.
I will admit that going to some fast food places is a little shocking now days. Diana and I have stopped eating at some of the national chains and switched to local mom and pop places. The mom and pop places used to be a little more expensive, and some of them have raised prices a little, but I think they were always willing to pay a decent wage and don’t have shareholders demanding exhorbident profits. I also think that many fast food chains just raised prices because at the time, they could get away with it because people were expecting higher prices. As JoAnn learned, it might be a while before she goes back into that particular chain.
I will say, that the economy seems to be doing better right now than almost anytime since I entered the workforce in 1988. The evidence is all around with orange barrels and new construction projects, and new ones still being announced. The crypto-currency bubble has popped with just the one bank failure mentioned by Sheila. I don’t see evidence of another bubble, like in 2007 when there was a loan office on every corner. Maybe there are too many microbreweries around, but I don’t think that’s going to take down the economy.
There are problems in the housing market. The US reliance on 30 year fixed rate mortgages builds in some problems both when interest rates rise and fall. Speaking of interest rates, my first mortgage was at 16% in 1988, so 6% or 8% still seems reasonable. Zoning laws in most municipalities severely restrict the building of affordable housing leading to a host of problems and the IRS mortgage interest exemption also inflates housing prices. But, those problems have always been built into the system, it’s just we are seeing all of the worst effects right now.
It seems that the last few years, despite the turmoil the Pandemic induced, have been markedly different from the TFG where it seemed like the main economic policy was just to keep the Stock Market flying high and I have said before, the stock market is not the economy. It reflects the economy often, but it doesn’t reflect what’s happening on the streets to the little guy, and this time things feel different, in a good way.
The Fed has spent trillions propping up the banking system and the economy (QE). Neither the DEMS nor the GOP are equipped to tell the real story of the economy because of the illiteracy of Americans. The DEMS uses “Bidenomics” to claim credit for any positive economic news.
The GOP hones in on all the negativity they create via Rupert Murdoch et al. Americans are trained to focus on negativity. Reading books on the economy or the Fed/banking system is done by a tiny percentage of Americans.
I was told to keep the message at a 5th-grade level when I started performing journalism for the masses. Most of my stories wouldn’t fit that criteria, and I refused to “dumb it down.” The masses didn’t read it…a label of “high brow” and “intellectual” were used, keeping readers away.
I read the AXIOS article referenced and wonder what percent of Americans would grasp the data and facts behind the good news.
We want to be told what and how to think, but at a level we can understand. If they happen to be attractive and blonde females, all the better. 😉
Also, if you want to juice the consumer economy (for the little guys) with a 2% boost, do what Europe did and cap credit card fees. In the US credit card fees are 9 times higher than the EU. Capping credit card fees would immediately remove the hidden 2% personal corporate profit tax that every consumer is paying right now at the retail level.
Fifty-five years ago I worked in the summer for a local nursery. I made $1.75 an hour. The highest paid laborer made $2.25. Most of the laborers were illiterate. After they found out I could read and write and work hard, our conversations broadened to politics at times. I was astonished to learn how politically astute they were. Network news was their only source of information. Even so, they could identify political BS about as well as I could and in a way we could share. Commenters have all drawn their own conclusions about uninformed voters. It is tempting to judge today’s voters as lazy, but it is much harder to sift through the channels to inform oneself. Then we have to endure all of the conclusions by commentators, particularly those about politics, though most acknowledge it is too soon to conclude anything in this election cycle. We are all picking through the garbage to get our information. Is it any wonder that many do not try?
Just like Obama. If you throw enough national debt money you can prop up the economy! Obama and Congress blew or lost $10 trillion. The market will take care of itself.
Trump propped up the nation during Covid as Congress shut down everything.
Obamas inflation reduction act and recovery act threw away more by the trillions causing the highest inflation rate in 50 years at above 7%. Again poor governance at best.
At $34 trillion in national debt and prices at all time high, inflation has done its damage. Everything is up in price, the poor are being hurt more than ever, housing costs across the country have skyrocketed all because the solution is to pour more money at it.
“Owe no man nothing”? Biblical principles we love to hate are costing us in interest. Thats programs we want to fund, but must borrow to fund them.
In 2021 we were at $28.5 trillion now in 2023 we are at $33.6trillion.
https://www.investopedia.com/us-national-debt-by-year-7499291
https://www.pgpf.org/national-debt-clock
We owe not $82,000 per person but now $101,000.
Biden destroyed a booming economy in 2020 with Green Deal initiatives and climate change proposals. He helped start two wars by his Afghanistan debacle, the worst since tge Kisdinger collapse of Saigon.
Biden is the most expensive President.
People are returning to work but they are earning less by 8% just two years ago.
Democrats CANNOT govern. They are poor at it.
Have you seen the social media app on the human excrement on the streets of San Francisco? Its a brown map of ghe city on the app where its covered up. People in Silicon Valley lost their financial futures as the tech boom had no easing but blew up in their faces. All of this was done by Biden and his policies. Now what is left a market that has had two volatile cycles over the last two years.
It will recover, people will invest, its what a capitalist country does on its own.
Obama blamed George W. for $3 trillion debt in 8 years, remember how he acted like he was fiscally conservative? Wow what a shame, what a le, what a bust. His counter part Biden has pent $5 trillion in two years!
Biden has done great things! High inflation over two years, great volatile markets over two years and a booming national debt. What a joke!!
This is about what people “feel” (feelings drive Trump and anti-Biden). Poll last week by NYTIMES of “Biden voters in swing states”. Those who say “the economy is poor or only fair” – even nearly 60% of those making $100K +, 80% or over by those ages 18-45……
People don’t vote facts; they vote how they feel. “It’s the economy, stupid…” rings again.
By coincidence, I was turned onto this article from “Science Advances” just yesterday, as an answer to wondering why the conservatives are so susceptible to garbage information:
https://www.science.org/doi/10.1126/sciadv.abf1234
Here is a bit of the “Results” section of the research article:
“Consistent with other studies, we find that American conservatives are more likely than liberals to hold misperceptions. Visual inspection suggests stark ideological differences. Conservatives tend to claim more falsehoods are true (Fig. 1A), while the number of truths believed is modestly lower (Fig. 1B). Similarly, conservatives’ sensitivity tends to be lower and their response bias higher (Fig. 1, C and D). We estimate the relationship between ideology and the latter two outcomes, sensitivity and response bias, using random effects regression models. ”
I was told that there is a lot of other research into the same question, with similar results.
Still the point, above, about the billionaire owned media is obviously part of the problem.
Complaints about the economy make me question the current high traffic all times of day and evenings, filled parking lots at stores and big box stores. They are complaining but they are buying…or they are charging and paying later is an iffy situation.
Its also, “its the national debt stupid”. Now media commentators are waking up on both sides. I listened to Mark Levin before he was on Fox. His main comment was that he could live with the political changes as long as we could afford to run the government.
I really love reading comments that we agree and disagree on. By what I care about most is a balanced government that taxes enough and spends less than it has in the past to create a balanced budget now or in a few years.
You also have to look at what the government did.
The climate change initiatives caused huge fluctuations in the economy. 7 % inflation caused prices to increase over 2 years.
We did not need an increase of $5 trillion in national debt over two years. We cano afford it
One hidden measure of “the economy” is the rate of transfer of wealth from those who work for a living to the wealthy (those with sufficient assets to invest instead of work).
The wealthy literally live off the productivity of workers.
Consider modern China under Xi Jinping. Worker productivity has been greatly increased due to automation of the tools of production bought/owned by investors. That led to a new standard of “wealthy.
Consider recovery here from “The Depression” under FDR. Keep workers “whole” so they can afford to survive and buy the output of their working effort, products.
Consider Gates/Steve Jobs/Bezos/Musk. They were in positions to invest in “artificial” intelligence which literally exploded output per hour of “labor”. Also output per worker per $ invested.
JoAnne – YES -personal debt (credit card debt) is rising fast. We continue “amusing ourselves to death” with food, “stuff”, toys, etc…A way of dealing with fear??
The dark money current going through US Congress is causing negative financial consequences for Americans. Magas selling out for profit to promote agendas to shore up control for their libertine capitalists’ sponsors from God knows where, cost every American. The expense and waste of taxpayers’ money for their political games and sabotage is substantial and keeps us from getting to the business of solutions.
Shelter,food,insurance and Healthcare costs have all risen considerably the last 3-4 years. People will vote wrt their lived experience– and rightfully so. (No pun intended)
I don’t expect a group of affluent/Caucasian/retirees to understand that. If you can afford to spend 3 months on a cruise-ship,you’re obviously going to be a bit clueless.
Starting in 2024 Indiana will require a class in financial literacy/personal finance as a requirement to graduate from high school.
I’m amazed at how many adults don’t understand the benefits of a 401k or setting up a Roth IRA or how even investing $100 per month when you start in your 20’s can translate into over a million by the age of 65, when invested. Also, paying an extra amount each month, applied directly to principal on your mortgage, can shorten the length and take thousands off your total interest expense over the life of the loan. There are all kind of mortgage calculators online where you can see the benefits of paying a little extra each month in an amortization schedule. This information can be empowering- you controlling your money rather than your bills controlling you.
If adults don’t understand, how can they teach their children? When people stop thinking the government should take care of their every need or that their money problems are the fault of the ultra rich, maybe they will make better decisions. The research says: graduate high school, get a full time job, get married before having children and you can avoid poverty. Dave Ramsey’s Financial Peace program was a forerunner of trying to break the cycle that you don’t have to be poor when you control your money with the right kind of decisions. It takes hard work, intentionally and sacrifice. It won’t fix every situation but it’s a major start to changing the current mindset.
Almost every kid and adult have access to the internet in some form – the information is at their fingertips and there for the taking.
Ian has an important point. Lived experience. I am 53, still paying on student loans, living in a 1 bdrm apt, on my own. Had a paid off car… serious car trouble, to the tune of a few thousand. Then medical issues which were only partially paid by insurance… oh, did I mention a high deductible? Last year’s electric bills also threw me into a tailspin, because the hvac unit I had was 40 years old, and the apt complex wouldn’t get a new one until it crapped out (which it did on July 4 finally). Throw in having to buy groceries on credit card for a bit. I have no spouse, nor family. And guess who’s in over her head in debt now? Yeah, had NO credit card debt last August. A bit more than a year later, I’m now in a debt relief program. Oh, and I was paid throughout covid, and continued to pay on my student loans. NOW I need the help. This will be the third time I’ve applied for school loan forgiveness. Third time’s a charm? By the way, I’m still having medical issues. Oh, have I mentioned that I have 3 jobs and haven’t been on a vacation in over a decade? Is the economy better? Sure. But the damage has been done.
The question is for whom is the economy good?
I’m sure things are good for the Acela corridor and for such Manhattenites as Paul Krugman.
I’m not against civics classes,per se…The public could attend all of the civics classes available to what end?
Those classes attended by the public have no bearing upon the candidates chosen by the private political parties for the public to choose from. You can have a well educated public given lousy candidates by all political parties.